Marvell Technology's AI Boost: Future Looks Bright
Hey everyone! So, Marvell Technology, you know, the chip folks, just shared their predictions for the next few months, and it looks pretty solid. They're thinking revenue for the second quarter will be even better than what folks on Wall Street guessed. Why? Well, it seems like everyone wants their special chips, especially the ones that power all that cool artificial intelligence stuff happening in big data centers.
Yeah, these custom AI chips are apparently a big deal and are really driving their growth. But it's not just AI chips, their networking chips and something called electro-optics are getting a lot of orders too. This is helping those huge companies, the 'hyperscalers', build out their infrastructure to handle more AI work. Marvell actually said after they shared their results that they think the AI boom will keep going strong. This is because those big companies are spending a lot, and there are new government data center projects popping up, plus new players in emerging markets are expanding the whole market. Sounds like some good chances for more growth, right?
Get this, the part of Marvell's business that deals with data centers is huge, like 76% of all their money! And in the first three months of the year, that segment brought in a whopping $1.44 billion. Their other business areas, like the ones for phone carriers and businesses, are also slowly getting back on track after a time where there was too much stuff in stock. One analyst, Angelo Zino, thinks these custom chips will be the main thing pushing growth for the next few years, like 3 to 5 years. He even said it'll help their profits, even if the chips cost a bit less to make. He also pointed out that Marvell is having a webinar about custom chips soon, and maybe they'll show off more opportunities and even some new customers they've won over.
On the flip side, it wasn't all sunshine and rainbows. The part of their business that sells to regular people wasn't doing so well. Revenue dropped by almost 30% compared to the last three months, mainly because of how gaming demand changes with the seasons. The industrial side also had a tough time, with revenue going down too. Because of all this, the company's stock dipped a little bit after the market closed.
For the next three months, they're expecting around $2 billion in revenue, give or take 5%. Analysts were thinking around $1.98 billion, so Marvell's prediction is a bit higher. Also, back in May, Marvell actually pushed back their investor day because things in the economy were a bit up in the air, which is understandable, I guess. They did report about $1.9 billion in revenue for the quarter that wrapped up in early May, which was also a little better than what the analysts expected. Kinda cool to see how things are going, huh?
